Shares of Applied Materials (AMAT) plunged 6.35% in pre-market trading on Friday following the release of its fiscal second-quarter earnings report. The semiconductor equipment maker's results fell short of expectations, particularly in terms of revenue, and raised concerns about the impact of export controls and trade tensions with China.

Applied Materials reported adjusted earnings per share of $2.39, surpassing analyst estimates of $2.31. However, the company's revenue of $7.10 billion missed the expected $7.13 billion. The semiconductor systems segment, which is the largest contributor to the company's total revenue, underperformed with sales of $5.26 billion, below analysts' estimates of $5.32 billion.

Investors were particularly concerned about Applied Materials' exposure to China, which has been a significant market for the company. Revenue from China accounted for about 25% of total sales during the second quarter, down from 43% a year earlier. This decline highlights the ongoing impact of trade tensions and U.S. export restrictions on semiconductor equipment to China. Despite these challenges, CFO Brice Hill stated, "Despite the dynamic economic and trade environment, we have not seen significant changes to customer demand."

Looking ahead, Applied Materials provided guidance for the third quarter, forecasting revenue of $7.20 billion (plus or minus $500 million), which is slightly above the analyst consensus of $7.19 billion. However, this outlook was not enough to offset concerns about the company's ability to navigate the complex geopolitical landscape and maintain growth in the face of export controls. The stock's sharp decline reflects investor uncertainty about Applied Materials' future performance in light of these challenges.